5 Key Metrics to Measure the Success of Your Paid Campaigns

Friday 08th, April 2016

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If you’re managing a Google AdWords account to complement your SEO efforts, you’ll know about the sheer amount of metrics that are available to track and analyze the results. Since everyone has a limited bandwidth, it is better to narrow down to some key metrics that will give a meaningful insight into what is working and what’s not.

Let’s delve into metrics that will give you the most value.

  1. Quality Score

Quality score is the parameter used by Google to measure the relevance of your keywords and ensures that the users see relevant ads and have a positive experience. There are a number of factors that contributes to the quality score:

  • Quality of your landing page.
  • Click-through rate (CTR) of the display URLs in the ad group.
  • The relevance of your ad to the keyword and search query.
  • CTR of the keyword and its corresponding ad.
  • Relevance of the keyword to its ad group.

It is absolutely essential to maintain a good quality score as Google uses it to determine your ad rankings and the CPC. You might have done an excellent keyword research but if you have low quality scores, you’re missing some piece of the puzzle.

  1. Click-Through Rate

If you go out and ask any PPC expert, ‘what is the most important metric while analyzing AdWords account?’ Click through rate will be the most common answer.

Okay.

But why is it so important?

  • It is the most important factor which determines quality scores.
  • It tells you whether the ads are relevant to you or not.
  • Click through rates indicates if your ad copy or keywords need improvement.

If your CTR is low, then you can be assured that your conversions will take a hit. Hence having a good Click through rate is mandatory if you want the top slot in the ad pane.

  1. Conversion Rate

A conversion is a customer action that provides value to a business. Conversion rate tells you the number of people who clicked your ad and went on to complete the desired action in your page- which can be making a purchase, subscription to a newsletter or filling out a form.

Conversion rate is as important as your CTR because you don’t want to end paying for people who clicked on your ad and didn’t go anything meaningful. Google AdWords provides a conversion tracking code to see which ad clicks lead to these actions.

Strong conversion rates indicate that the money being spent is coming back to you in the form of profits. Better conversion rates mean better ROI.

  1. Cost-Per-Conversion(CPC)

Cost per click is the measure of the price paid for each ad click.

Joe Vivolo of KoMarketing Associates put it aptly, “This obviously is the number that makes or breaks a campaign from a success/failure standpoint.” It is made up of many factors that includes bidder competition, how much the top bidders are paying and the search volume of each keyword.

In simple terms, if you have to spend more to gain a new customer than what he is actually worth- your campaign is failing.

  1. Wasted Spend

Wasted spend is the measure of the number of dollars that went down the drain paying for the clicks that didn’t convert – an ROI killer, to be precise. The most effective way to reduce the wasted spend is by smartly using the negative keywords.

Negative words are the keywords that allows you to filter out the traffic that you deem unworthy for your business. Essentially you’re preventing your ads being displayed for those particular search queries.

These are the five metrics that will provide the most bang for your buck. This, obviously doesn’t mean to ignore other metrics. In a given limited time, to analyze a campaign these metrics will help you figure out an overview of your performance and will help you make decisions.

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